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Pros and Cons When Selling on Amazon

I’ve been selling for over a year now on Amazon UK as well as across Europe. First of all Amazon is an amazing way for people to get into selling online. The amount of buying traffic that passes through Amazon’s platform is astonishing.

This post is not going to get into the technicalities of selling on Amazon, but I just wanted to share my thoughts on the good and bad points about selling on Amazon.

Good things about selling on Amazon

Instant access to millions of potential customers

Relatively easy to set up a product listing

Amazon handles all payment processing

Amazon handles all refunds and returns

If you choose Amazon can handle all product storing in their warehouses

If you choose Amazon will package and post your products

Customer messaging system

Visitor and order data

Simple advertising platform to increase sales

Basically if you have things to sell then Amazon is a must, you should list your products for sale on Amazon otherwise you will be missing out on a huge market. There will be some products that are not suited for Amazon but most are.

Bad things about selling on Amazon

Open to criticism from customers – reviews & feedback

Potential high competition that can drive prices down

Amazon takes a big chunk of your profits (30% or more)

Potential for negative/aggressive actions from competition

You are always under the control of Amazon rather than your own website/store

More about these negative points

Amazon is great, and to repeat myself you should sell on Amazon’s platform. But there are headaches and when you list your product on Amazon you are essentially opening yourself up for analysis and potential criticism. Some people feel it is their right to inform other people about everything, and sometimes they are unaware of how important reviews are to an Amazon seller.

For example, on one of my products I got a 3-star review, which is not great and could put people off buying. Their comment was “haven’t opened it yet but looks OK”. I had to grit my teeth and just accept it, this is a price I have to pay to use Amazon’s platform. Maybe I could have tried to follow up with this reviewer to get them to alter their review, but this can be time consuming and likely unsuccessful.

When customers buy from shops on the high street or on other companies websites they generally do not leave a review. If something is not perfect with the product they either put up with it or they return it. This is normally the end of the subject.

With an Amazon purchase, if something is not right with the product the customer normally vents their disapproval in the reviews. Another real life example of one of my products is when the product in question did not fit the persons car correctly. The product works with 95% of cars out there but unfortunately it did not fit right with this customers make and model.

In normal situations the customer would return the item and get a refund. This is very easy with Amazon, you even get free postage to return the product and an instant refund. However, instead of returning the product this Amazon seller decided to leave a 2-star review, simply saying it did not attach to their car.

Brands that do not reply on Amazon do just fine

I was at an international trade show recently and was chatting to a major brand owner in the same space as me. They have hundreds of products and a great brand. They sold into retailers as well as on their own website. They were doing great. They also sold on Amazon.

I checked their Amazon listing for a product that was very similar to mine. It has 3 reviews and 2 of them were negative. It got me thinking that if I ramped up sales on my own website and looked to get into retailers I could do very well with my products. My comparable product has around 300 reviews with 293 of the reviews 4 & 5-stars.

While reviews can be a pain they are also a fantastic validation metric and help make sure myself as a seller does the best I can with my product and customer service. I know I have a great product because my customers tell me. So I can grow the business away from Amazon with confidence.

However, it is harder (a lot harder) to grow your own website and make sales though it. It is also tough to get into retail stores, especially the bigger ones. This is why Amazon is a perfect place to start for any budding online seller.

Amazon’s customers not mine

Another issue with selling on Amazon is that they control all contact with your customer. You never get email addresses so you cannot grow an email list easily. Having customer emails is a great way to grow your business because you can email them with new products that they could buy and also get their feedback and opinions on things.

Amazon lets you contact customers through their messaging platform, but you never see real email addresses. You are also limited about what you can and cannot say in these messages. If you sold via your own website you could easily get customer email addresses, but of course getting these customers in the first place is the tricky thing…

Conclusion – should you sell on Amazon?

You should definitely sell on Amazon. This post is not a moan, even though it may sound like it a little. I just wanted to get the point across that if you sell on Amazon you are opening your product up to scrutiny. If your product is not 100% what the customer wants then there is the potential that they will leave a negative review. This will impact on future sales of your product on Amazon.

On the flip side though you would not make all these sales unless you sold on Amazon in the first place. So the conclusion is that what makes Amazon great is what makes it bad for us sellers, but overall it is a fantastic platform to sell on.

Also, it pushes you to make and sell high quality products. If you don’t your customers will let you know. Also, customer comments allow us to see what is not right with our products so we can develop and improve them, which is great and drives innovation.